N.C. homebuilders could get temporary tax relief
Posted June 29, 2009 7:24 p.m. EDT
Updated June 29, 2009 7:35 p.m. EDT
Raleigh, N.C. — A bill in the North Carolina Senate would provide homebuilders with temporary tax relief during the recession.
Last week, the state House approved the bill that would allow them to defer tax payments on any new houses for the next three years, or until they are sold. Homebuilders, however, would still be required to pay taxes on the land.
Once a house is sold, the homebuilder must pay back the taxes, plus interest. The cost would likely be passed on to the new homeowner.
"You've got a builder, and you have 20 houses you are trying to sell, you can be looking at a $500,000 tax bill, if you look at the whole package," said Tim Minton, director of the North Carolina Homebuilder's Association.
"It's a good thing, on the surface, to offer relief to builders, but there is a cost associated with it," Wake County Deputy Manager Joe Durham said.
The bill could cost Wake County an estimated $3.7 million in lost revenue next year – money that Durham said could go to schools, human services and other departments.
Builders see it differently.
"I don't see this as the builders getting a break," Minton said. "What I see this as is an opportunity for the builders to stay in business, so that they can continue to help build our tax base."
"If the builders go away, we're not going to have a tax base," he added.